Trade-Ideas LLC identified

Enanta Pharmaceuticals

(

ENTA

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Enanta Pharmaceuticals as such a stock due to the following factors:

  • ENTA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.0 million.
  • ENTA has traded 55,698 shares today.
  • ENTA is down 3.4% today.
  • ENTA was up 6.9% yesterday.

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More details on ENTA:

Enanta Pharmaceuticals, Inc., a biotechnology company, discovers and develops small molecule drugs for the infectious disease field in the United States. ENTA has a PE ratio of 7. Currently there are 3 analysts that rate Enanta Pharmaceuticals a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Enanta Pharmaceuticals has been 396,500 shares per day over the past 30 days. Enanta has a market cap of $449.3 million and is part of the health care sector and drugs industry. The stock has a beta of 0.26 and a short float of 24.2% with 4.26 days to cover. Shares are down 52.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Enanta Pharmaceuticals as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • ENTA's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 22.89, which clearly demonstrates the ability to cover short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Biotechnology industry and the overall market, ENANTA PHARMACEUTICALS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • ENANTA PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ENANTA PHARMACEUTICALS INC turned its bottom line around by earning $1.76 versus -$0.78 in the prior year. This year, the market expects an improvement in earnings ($3.95 versus $1.76).
  • The gross profit margin for ENANTA PHARMACEUTICALS INC is rather low; currently it is at 16.10%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 20.84% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to -$14.20 million or 140.45% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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